J. Richard Hill & Co. is an international real estate consultancy focused on retail-centered opportunities, including malls, shopping centers and mixed-use developments. The company provides comprehensive solutions that are market-driven, income producing and sustainable to address key real estate challenges.

Challenge

Attracting luxury brands to a mall can be tough at the best of times. Convincing them to commit to a multi-use development project, located away from any major urban center and before the development broke ground, is almost unheard of in today’s market. That was the challenge facing J. Richard Hill & Co. The real estate consultancy was responsible for identifying potential retail tenants for builder Wai Kai Commercial Development and their 235,000 square foot mixed-use development in West Oahu, Hawaii. To accomplish this, J. Richard Hill & Co. needed to understand the consumers who lived near the development and whether they shopped at the upscale retailers being targeted. With this data, the leasing teams at J. Richard Hill & Co. could demonstrate to prospective tenants that the planned Wai Kai community would put them close to their core customers.

Solution

The West Oahu trade area was divided into 14 sectors, which were determined by neighborhood types, drive times and natural barriers such as geography, major roads and expressways. Once these sectors were identified, we used PRIZM® Premier to determine the dominant consumer household segments for each area. These segments were used to create custom target groups that described households by life stage and lifestyle, as well as other consumer buying and behavioral characteristics.

J. Richard Hill & Co. identified nine target retailers it thought would be a good fit for the mixed-use development. To confirm the company’s hypothesis, we geofenced standalone stores for each of the nine target retailers on the mainland and used our mobile data to understand the visitors going to those locations. These mobile data were linked with PRIZM to profile and segment the shoppers visiting each brand. If visitors associated with a specific segment visited a target retailer 30 percent more often than the average consumer, then those retailers were singled out for further study. We then looked for commonalities between the customer segments to see if the targeted retailers appealed to similar consumers.

After identifying the core consumer segments for each of the nine retailers, we used mobile analytics to determine if those same consumer segments were present in high concentrations in and around the planned Wai Kai development. The core consumer segments for each of the targeted retailers were located by ZIP code and U.S. census block group in West Oahu. These results were color-coded on a map to get a precise look at the market, highlighting neighborhoods that were most likely to shop at some of the nine target retailers. Finally, to validate the market opportunity, we used our Retail Market Power database to assess the retail climate and demand for luxury goods in West Oahu.

Results

Our analysis showed a clear and significant demand for luxury retail in West Oahu. In total, there were more than 100,000 households in West Oahu that were likely shoppers of luxury goods. The analysis indicated that the high net worth and aspirational households in the Wai Kai area were more than three times as likely to shop at the luxury brands that J. Richard Hill & Co. identified as potential tenants. Our analysis also revealed some surprises that further bolstered the case for these retailers to locate in Wai Kai. While households with incomes less than $65,000, who also tend to rent, would not be considered the typical luxury shopper, our mobile data revealed that these households were more likely to shop certain luxury brands than the average household. Based on our analysis, the area offered an optimal balance between high net worth and aspirational households and could support the luxury retailers sought by J. Richard Hill & Co. for the Wai Kai development.

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